Common Financial Mistakes in Your 20s
Being in your twenties is an exciting time for most people. Many are just getting out of college and looking to get started in their new career. There are many mistakes that people in their twenties make that could set them back years financially.
The first mistake that many people in their twenties make is to get caught up in a credit card craze. Credit cards are not free money; it all has to be paid back with interest. Many in their twenties only think about gaining good credit so they can get loans in the future, but then get in way over their head and wind up damaging their credit.
The next mistake that many make in their twenties is to skip a student loan payment. Skipping even one payment can add fees and interest. This too can damage their credit, and this is the time in their life that they do need to work on building their credit.
Many who recently graduate college want to go out and travel a bit. This is not advisable. When you are just getting out of college and are trying to build your life you need to focus on paying off debt and building credit instead of spending money traveling. There will be time for that later in life. Right now there are things you must do to insure your financial future, so remember there is time for fun and travel later on.
Many starting off in a new life and career can tend to let their bills slide. They are so focused on other things and working that they just allow their bills to fall to the wayside. This is a big mistake. When you get behind on your bills you end up with late fees and depending on the bill more interest. This will cost you more overall, and that is money you could be saving for retirement.
The next mistake that many people in their twenties make is not paying into a retirement savings fund. It is very important to start saving in your twenties for retirement. Many think that they do not need to start saving for retirement now, there will be time for that in the future. The problem is if you wait to start saving for retirement you will never be able to catch up to where you would be had you started saving in your twenties. When you wait to start saving for retirement you lose out on all the interest the account would acquire.
There are many things that people in their twenties need to worry about. Making these mistakes should not be one of them. If they stay on top of everything and realize there will be time later in life to enjoy traveling and such then they will do better throughout their whole career.